MOSCOW, Aug 18 (Reuters) - Russia said it had lost track of a newly-launched, multi-million-dollar telecommunications satellite on Thursday, the latest in a series of setbacks that have dogged its space industry.

The $265-million Express AM-4 satellite, described by its makers as the most powerful satellite ever built in Europe, launched late on Wednesday aboard a Proton-M rocket from the Russian-leased launchpad in Kazakhstan.

The Russian space agency said the first stages of the launch went smoothly but communication with the satellite was lost due to a failure of the Briz-M upper stage.

It said experts were working to re-establish contact with the craft, built by Astrium, a unit of European aerospace group EADS , to provide digital TV, Internet and telecoms services for Russia over the next 15 years.

Judging by early efforts, officials have a roughly 75 percent chance of linking back to the satellite and manoeuvring it into the correct orbit, space industry expert Igor Lissov told Reuters.

Its loss would be a "nightmare" for Russia's industry, he said, delaying key commercial projects by three to four years and embarrassing Moscow at a time when it hopes to showcase its technology at this week's MAKS airshow outside the capital.

The mishap follows a series of botched launches, including three poorly insured orbiters which crashed into the Pacific Ocean earlier this year costing $160 million and setting back Kremlin plans for a global positioning system to rival the U.S.-made GPS.

A breakdown of the Briz-KM engine burns led to the loss of a key military Earth-mapping satellite earlier this year.